We Need to be Better at Industrial Policy By Amanda Mayoral, CPA Economist Industrial policy is critical to competing in a global economy and maintaining our national security. In the world of U.S. economic policymaking, we need to stop wasting time debating whether to “do” industrial policy and rather debate how to improve it.…
Last year, America’s largest chipmaker, Intel, agreed to sell its memory chip business to South Korean memory chipmaker SK Hynix for $9 billion, part of the routine musical chairs of tech companies repositioning their assets. But in the past month, disturbing reports have emerged that China may be imposing forced technology transfer on these companies…
Summary: This is the first ever estimate of substantial missing import data due to the U.S de minimis program. The “de minimis” provision of U.S. customs law allows imports valued at less than $800 to enter the U.S. duty-free. The impact of de minimis on the U.S. economy is large and getting larger. We…
by Jeff Ferry and David Morse Jeff Ferry is chief economist and David Morse is tax policy director at the Coalition for a Prosperous America. They thank Mary Hollenbeck for her data collection and additional research for this article. In this article, Ferry and Morse examine the advantages and disadvantages of pillar 1 of the…
With consumer price inflation (CPI) running at 6.8% as of November 2021, many importers are trying to use inflation as an excuse for repealing the tariffs enacted by former President Donald Trump and continued by President Joe Biden. This is special interest pleading and bad economics. A close look at the state of the U.S.…
Global capital flows are the driving force behind the rise of the dollar, which rose 3.9% in 2021. In the last ten years, the dollar is up 25.5%[1]. The US attracts capital for many reasons, including tax avoidance, speculative trading, and a relatively small amount of genuine investment. The deregulation of financial markets in the…
U.S. Trade Policy: Over Half a Century of Unreciprocated Tariff Cuts By Amanda Mayoral, CPA Economist Summary Points: The US held high tariff rates from 1816 until the middle of the 20th century The US then cut tariffs more than most countries, often unilaterally, without also requiring tariff reductions by others Today, the US has…
A new paper by the “China Shock” economists adds to the growing mountain of literature documenting the costs of free trade events to the U.S. economy over the past half century. Their new paper, On the Persistence of the China Shock, shows that increased unemployment, protracted withdrawal from the labor force, and other social ills…
Background When inflation threatens America’s stability and economic growth, the Fed raises the Federal Funds Rate (FFR). This reduces domestic demand for borrowed funds, and that reduces the growth of domestic money in circulation and thus the rate of inflation. This approach worked reasonably well from the 1930s when the FFR became an official policy…
Not All Tariffs Are the Same: A Case to Consider Optimal Tariff Policy By Amanda Mayoral, CPA Economist Summary Points: Despite popular misconception, economic theory has long suggested that tariffs can benefit a country, particularly one like the US. The most advantageous tariffs are optimal tariffs. This is because optimal tariffs balance the…
